Factoring Finance Mythbusting!
Remember the stories we used to hear when we were kids? Creatures like Bigfoot or stories like Hercules were myths we believed… at least for a little bit. But even though we’re older now and know better, there’s still the occasional myth that we tend to believe. Specifically with real-world actualities. And — just like with any industry—there are plenty of myths associated with factoring.
Why Are Companies Selling Account Receivable?
Every business owner encounters a situation where they need more cash for operations. You can have a superior product with large profits. However, if cash flow is bad, your business will suffer. It is possible to be successful in business but still encounter cash flow issues since good cash flow is essential to running a successful business.
Need Help With Your Cash Flow?
From time to time, businesses fall short when it comes to their cash flow. This can cause problems with payroll, business expenses, or even with client acquisitions. Most businesses have accounts receivable, but it takes time to invoice clients and then collect any outstanding debt. Well, what happens when your money runs dry?
How Does Factoring Work For My Company?
No matter if it’s a good time or a bad time for the economy, businesses may still need liquid capital to enhance its cash flow cycle and when you’re waiting on capital from your clients, you need that cash more than ever. Consider factoring your company’s invoices to access that capital and don’t worry if you haven’t heard of factoring before. If you’re wondering “what is factoring?” or “how does factoring work?” United Capital Funding is here to help.
Loan Programs for Small Businesses Impacted by COVID-19
Small businesses are the backbone of the American economy. There is no debate that the current COVID-19 pandemic will cause significant economic harm to this critical part of our nations GDP. How important is it for small businesses in the United States to be vibrant and successful? Consider these facts about the magnitude of the role small businesses contribute to the United States economy (data from the Office of Advocacy, Small Business Administration).
Why is a Factoring Company Better Than A Broker?
What Is A Factoring Company?
Factoring is the purchase of account receivables. A third-party financial business—a factoring company—takes over your unpaid invoices by paying you the amount that’s due, minus one small fee. Factoring can be especially useful for business-to-business (B2B) or business-to-government (B2G) invoices. It is not a loan and factoring companies are not banks or brokers. It frees up money that’s already yours.
Approvals Are Easy
To qualify for loans, you must fill out what feels like hundreds of forms throughout a weeks-long process. You’re surprised they don’t want your blood type and a copy of your eighth-grade report card! Working with a factoring company is much more straightforward. Most businesses are approved in less than 24 hours and paid within a few days. The money is directly transferred into your whatever account you choose.
Your business does not have to be in financial trouble to consider factoring. In fact, most business clients of factoring companies are on solid ground and growing. With a simple online application, startups and certified-minority contractors can also receive funding.
No Hidden Fees or Interest
Since invoice factoring is not a loan, there’s no interest. There’s also no hidden fees, application fees, start-up fees, documentation fees, closing fees, or termination fees. After providing a copy of your invoice to the factoring a company, such as United Capital Funding, they immediately pay you up to 90%. Then, they act as your accounts receivables department. Once your client pays them, the factoring company gives you the remaining amount, keeping a small fee for their services. You’ll know the exact fee from the beginning—and you’ll only be charged once. Everyone is better off.
They Partner, Not Overpower
Brokers charges fees to be a middleman between businesses and lenders. Factoring companies take over your accounts receivables. When you take a loan out from a bank or other financial institution, they’re only worried about you paying it back. Factoring companies treat you like a business partner, not a delinquent child. When you work with an invoice factoring company, they pay YOU real money from their own capital. Once they pay you, you don’t have to worry about chasing your invoices—or having a bank or lender chase after you.
Your Neighborhood Invoice Factoring Company
United Capital Funding provides factoring services nationwide. They partner with small businesses in every industry. Printing, staffing, telecommunications, transportation, communication, pharmaceutical, manufacturing and those with government contracts all benefit from factoring. Selling your accounts receivables is one of the best ways to grow your business and take charge of your capital. To get an instant quote, call 877.894.8232 or fill out this short form today.
Article Posted On: September 05, 2018